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Payva is a corporate payment system based in Armenia, which helps companies to cover employees’ expenses without any receipts or cash. Thanks to this service there is no need in giving people cash, check receipts, suffer while preparing expense reports. How did Payva team solve this problem and get excellent results (just in 4 months the project reached $3000 revenue which keeps growing now)? You will find out in today’s interview with the startup’s CEO Vladimir Danielyan.
We talk to startups and investors, you get the value.
Surely everyone who has ever gone on a business trip was faced with the need to confirm expenses after the trip — for transportation, food, etc. Often companies purchase corporate credit cards to arrange such payments. However, this method has drawbacks: it is difficult to track the nature of expenses, the bank charges a fee for using credit cards. In addition, this tool does not allow you to manage expense reports.
What is more, it is expensive for small and medium-sized businesses. Therefore, employees of small and medium-sized companies have to pay out of pocket, keep receipts, fill out expense reports and wait more than a month to get their money back until the employer reimburses the expenses. If the company can still afford to buy corporate credit cards, employees still have to keep receipts and fill out expense reports
Usually, expenses are proved with receipts that are transferred to the accounting officer. This takes a lot of time. In the previous working place, I spent a lot of time on business trips. It took me at least 30 minutes to legally correctly fill up the documents about each expenditure. What if a business trip lasted for 10 days?
That’s why we decided to create Payva — a platform that allows us to build up the financial policy of a company. We guarantee, that all payments which employees make will be in compliance with the company’s policies. For instance, if a manager is given a certain amount of money to buy 20 liters of gasoline per day, our payment system guarantees that he will spend only this amount of fuel. According to our calculations, one employee can steal about 20 liters out of 100 liters of gasoline. Our system prevents this.
Besides, we allow the business to save on accounting costs. There are calculations according to which on average in the world the cost of creating each accounting report costs a business $ 7. We give a free tool, thanks to which accountants do not need to spend 5–10 hours on this work.
Payva platform is a web and mobile application that allows companies to build up financial policies and control the payments of the employees. They can spend money only following the accepted rules through the Payva mobile application. We also provide our payment cards.
All expenses are divided into three categories: food, taxi, fuel, and gym. Besides, in Payva you can choose a special expense category, which cannot be paid, you can form some kind of a blacklist.
In fact, we offer payment system services (the same as MasterCard or Visa), which covers only corporate needs — expenses of the employees. Therefore, in order to use Payva, before going to a restaurant, an employee of the company(our customer) — must clarify that the place accepts cards. Now our network covers 250 locations, but we are constantly increasing it.
The application tracks the geographic location of the client. When an employee is found in a restaurant, the system activates the food budget. What is more, there is no need to scan the QR-code. When the employee wants to pay for the lunch in a restaurant, he opens an application on the phone and checks-in — the same as you do a check-in on Facebook.
Launching the application, we tested it on 5 companies, which had problems with the organization of logistic payments. Among them were supplying companies, which had to pay money for the gasoline, companies, which gave money for lunch as social security for their employees.
Before starting a startup, we talked a lot with CEO’s and CFO’s of companies. Having secured their support, we created an MVP and they were glad to use it. However, after the launch of the MVP, we had to change a lot in the product. Since we are dealing with the financial policies of companies we need to be very flexible to meet their needs.
We charge from 1 to 5 percent for our services. It depends on the type of services. For example, if a company uses our solution only to control gas costs, we take 2% of the transaction. If the service is used to control the cost of food or sports services — 5%.
We have been working on the project for about a year. During this time, 12 companies — local representatives of large international corporations — with a total staff of about 5,000 people, became our customers. Every day they conduct transactions worth about $ 3,000.
In April we started to receive revenue. Now monthly it is equal to about $3000.
In general, this product is free for companies. However, for $ 0.89 per employee per month, companies can subscribe to get a machine-based financial analysis tool. We analyze all the data that passes through our platform and can give the business analysis of the expenses, as well as recommendations for reducing them.
The main difficulty in this project is teaching the employees. In fact, different people are using our product. Among them, there are sales specialists, drivers, marketers and top management. All of them are different in mentality and the degree of using modern technology. At first, it wasn’t easy for us to teach people how to work with our platform, as it is a new type of product.
As for now, we are working on the Armenian market. However, in perspective, we are planning an expansion on the former-Soviet countries and the EU. One of the possible ways is to collaborate with large banking groups that work in several countries at once. Raiffeisen Bank is a good example. Having established such cooperation, we could very quickly deploy our product to 3–4 countries.
Apart from that, we are planning to set up a collaboration with companies in the telecom-industry, IT-sphere and delivery services. Our goal is to cover 20000 people who will use our platform in the nearest 6 months.
There are also plans to work in the B2C segment. For example, you have a child and he goes to school. Every day you give him money for travel and food. If it is cash, you cannot control whether he bought lunch or cigarettes. Using our platform, parents can be sure that the child bought the food. The platform allows you to set a limit and the nature of spending: for example, $20 only for lunch.
So far we have not attracted any investments. The project was developed purely at our own expenses. But for successful expansion to other countries, we will need investments. Now we are in active search.
Now new customers appear exclusively through direct sales. We have a very wide network, and we perfectly know the top management of the largest companies. Yet, when we go to other countries, we will review the strategy.
First of all, find a niche for your product. Perform in-depth analysis and identify Product-Market Fit. A lot of founders make a product, being sure that people will definitely use it. However, in fact, they spend a lot of time and money on something that no one needs. Before Payva, I had a different startup. I studied with it at the Armenian branch of the Founder Institute. Now this project is closed because we could not find the Product-Market Fit. I think this was the right decision.
Working in a local market, the number of payments per day is vital for us. For the global market, metrics are still definable.
How to prioritize and build platform features gradually? I do not have a know-how method. I decided that our KPIs should be consistent with the company’s mission. We measure them every week.
Do not be afraid to fail or make mistakes. In a startup, mistakes are the steps to accomplish the goal.
How to communicate with corporations so they pay attention to you? The only thing that companies want is to increase their incomes. This can be achieved in two ways: either by increasing revenues or by reducing costs. Therefore, if you want to create a product for companies, make sure that it directly or indirectly increases their income. After that, tell the business how your product saves its costs and brings more money.